China to use foreign capital to encourage innovation

China to use foreign capital to encourage innovation

BEIJING, Oct. 11 (Xinhua) -- China's Ministry of Commerce plans to change its strategy on foreign investment in a bid to lure foreign capital through market forces rather than administrative measures.

According to the 2006-2010 plan, China will favor foreign investment that is technology-intensive, energy-efficient and able to create more job opportunities, especially in the agriculture, advanced technology, environmental protection and the service sectors.

It will also encourage foreign investors to establish joint ventures or conduct other kinds of collaboration with local companies, especially private firms.

Under the plan, policy disparity between domestic and foreign companies will be gradually bridged.

A foreign investment monitoring system will be set up to defend industrial safety, standardize foreign mergers and acquisitions, ensure foreign companies fulfil their social responsibilities and guard the interests of local employees, it said.

Source: Xinhua